Trump says he’s terminating trade negotiations with Canada. What will happen with tariffs?

President Donald Trump announced on Friday via social media that he’s ending trade talks between the U.S. and Canada. The move could impact tariffs on one of America’s largest trade partners as a temporary pause is set to end early next month.

“We have just been informed that Canada, a very difficult Country to TRADE with, including the fact that they have charged our Farmers as much as 400% Tariffs, for years, on Dairy Products, has just announced that they are putting a Digital Services Tax on our American Technology Companies, which is a direct and blatant attack on our Country,” Trump wrote on his Truth Social account.

“They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”

Trump’s global tariff policies, which were rolled out on April 2, have been a point of contention for the housing market — particularly for homebuilders. For Canada and Mexico, these included 25% tariffs on all goods that aren’t compliant with the United States-Mexico-Canada Agreement (USMCA), as well as a 25% tariff on all imports of steel and aluminum.

Previous estimates from the National Association of Home Builders showed that tariffs could add another $10,900 to the cost of constructing a new home.

But only a week later, the president announced a 90-day pause for most tariffs, with the exception of an increase on Chinese imports to 125%. China is also a major supplier of materials for U.S. homebuilders.

On Thursday, CNBC reported that Trump could extend the deadline for restarting the tariffs. Most tariffs that were paused are set to resume July 8, while some that involve European trade partners would resume July 9.

The threat of tariffs has also impacted housing through stagnant mortgage rates. Going into the year, the Federal Reserve had penciled in multiple cuts to the Fed funds rate, but none have materialized. Last week, the Fed kept benchmark rates unchanged at a range of 4.25% to 4.5% for a fourth straight meeting.

That prompted outcries from the president and his administration — including Federal Housing Finance Agency Director Bill Pulte’s suggestion that Fed Chair Jerome Powell should resign. Powell responded soon after by arguing that monetary policy is in a good position to deal with changes to inflation and unemployment. Fed officials are still studying whether price increases tied to tariffs could be “more persistent,” Powell said.

“Avoiding that outcome will depend on the size of the tariff effects, on how long it takes for them to pass through fully into prices, and, ultimately, on keeping longer-term inflation expectations well anchored,” he said.